Federal Register / Vol. 71, No. 186 / Tuesday, September 26, 2006 / Notices 56203 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 3See Securities Exchange Act Release No. 54186 

(July 20, 2006), 71 FR 42698. 4The term ‘‘ITS Security’’ is defined in NASD 

Rule 5210(c) as ‘‘any security which may be traded 

through the [ITS] System by an ITS/CAES Market 

Maker.’’

5See Securities Exchange Act Release No. 53128 

(January 13, 2006), 71 FR 3550 (January 23, 2006); 

and 54085 (June 30, 2006), 71 FR 38910 (July 10, 

2006). Currently, the Nasdaq Exchange operates as 

a national securities exchange for securities listed 

on the Nasdaq Exchange and reported to the Joint 

Self-Regulatory Organization Plan Governing the 

Collection, Consolidation and Dissemination of 

Quotation and Transaction Information for NasdaqListed Securities on Exchanges on an Unlisted 

Trading Privileges Basis (‘‘Nasdaq-Listed 

Securities’’). 

6 15 U.S.C. 78o–3. 

7 15 U.S.C. 78o–3(b)(6). 

8 15 U.S.C. 78f(b)(5). 

9 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Amendment No. 1 and Amendment No. 2. 

Amendment No. 2 replaced and superceded the 

original rule filing and Amendment No. 1 in their 

entirety. 

4Exchange Act Release No. 54265 (August 2, 

2006), 71 FR 45879 (August 10, 2006). 

5See letter from Dennis A. Young, Vice President, 

Treasurer, Cosse International Securities, Inc., to 

Nancy Morris, Secretary, Commission, dated 

August 31, 2006. 

6See letter from Kathryn M. Moore, Assistant 

General Counsel, Regulatory Policy and Oversight, 

to Nancy M. Morris, Secretary, Commission, dated 

September 13, 2006. 

7See 12 CFR 220.1, et. seq. 8See Exchange Act Release No. 34073 (May 17, 

1994), 59 FR 26826 (May 24, 1994) (SR–NYSE–88–

35); see also NYSE Information Memo 94–22 (June 

10, 1994). 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change to adopt a new 

NASD rule relating to trade-throughs. 

The proposed rule change was 

published for comment in the Federal 

Register on July 27, 2006.3 The 

Commission received no comment 

letters on the proposal. 

Proposed rule NASD Rule 5150 would 

require an NASD member that is 

registered as a market maker with the 

Nasdaq Stock Market LLC (‘‘Nasdaq 

Exchange’’) in an ITS Security 4 to 

comply with the provisions of NASD 

Rule 5262 relating to trade-throughs 

with respect to that security for trades 

reported to the NASD. Accordingly, the 

NASD’s proposed rule will not take 

effect until the Nasdaq Exchange begins 

operations as an exchange in such 

securities.5 The proposed rule further 

defines the term ‘‘block transaction’’ for 

purposes of the rule. 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of Section 15A of the 

Act,6 in general, and with Section 

15A(b)(6) of the Act,7 in particular, in 

that it is designed to prevent fraudulent 

and manipulative acts and practices, to 

promote just and equitable principles of 

trade and, in general, to protect 

investors and the public interest. 

Proposed NASD Rule 5150 will 

maintain, after the Nasdaq Exchange 

begins operations as a national 

securities exchange for ITS Securities, 

the application of the NASD’s tradethrough rule, Rule 5162, to NASD 

members that are also Nasdaq market 

makers in ITS Securities to the extent 

such market makers report transactions 

in ITS Securities to the NASD. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (SR–NASD–2006–

081) be, and hereby is, approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Nancy M. Morris, 

Secretary. 

[FR Doc. 06–8238 Filed 9–25–06; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–54456; File No. SR–NASD–

2006–064] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Order Approving a 

Proposed Rule Change and 

Amendment Nos. 1 and 2 Thereto 

Relating to Extension of Time 

Requests 

September 15, 2006. 

I. Introduction 

On May 15, 2006, the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 2 thereunder, a proposed 

rule change seeking to adopt new Rule 

3160 (‘‘Extensions of Time under 

Regulation T and SEC Rule 15c3–3’’). 

NASD filed Amendment Nos. 1 and 2 to 

the proposed rule change on May 25, 

2006 and July 25, 2006, respectively.3

The proposed rule change, as amended, 

was published in the Federal Register 

on August 10, 2006.4 The Commission 

received one comment letter in response 

to the proposal.5 On September 13, 

2006, the NASD filed a response to the 

comment letter.6 This order approves 

the proposed rule change, as amended. 

II. Description 

NASD is proposing to adopt new Rule 

3160 to require (1) All clearing firm 

members for which NASD is the 

designated examining authority 

(‘‘DEA’’) pursuant to Rule 17d–1 under 

the Act to submit to NASD requests for 

extensions of time under Regulation T7

promulgated by the Federal Reserve 

Board, or pursuant to Rule 15c3–3(n) 

under the Act; and (2) each clearing firm 

member for which NASD is the DEA to 

file a monthly report with NASD 

indicating all broker-dealers for which it 

clears that have overall ratios of 

requested extensions of time to total 

transactions for the month that exceed 

a percentage specified by NASD. 

Extension of Time Requests 

As stated above, proposed NASD Rule 

3160(a) would require all clearing firm 

members for which NASD is DEA to 

submit to NASD requests for extensions 

of time under Regulation T and 

Exchange Act Rule 15c3–3(n). The 

Commission previously approved NYSE 

Rule 434 requiring each carrying firm 

for which the NYSE is the DEA to 

submit extensions requests to the 

NYSE.8 The SRO designated as a 

member’s DEA has responsibility for 

examining its members that are also 

members of another SRO for compliance 

with applicable financial responsibility 

rules such as Regulation T and 

Exchange Act Rule 15c3–3. NASD 

believes that requiring a member to 

submit extension requests to its DEA 

helps to ensure that the DEA receives 

complete extension information to assist 

it in performing this function and would 

ensure uniform application of standards 

to all customers of firms for which 

NASD is the DEA. 

Monthly Reporting Requirement 

Proposed NASD Rule 3160(b) would 

require each clearing firm member for 

which NASD is the DEA to file a 

monthly report with NASD, in such 

format as NASD may require, indicating 

all broker-dealers for which it clears that 

have overall ratios of requests for 

extensions of time under Regulation T 

and Rule 15c3–3(m) to total transactions 

for the month that exceed a percentage 

specified by NASD. The monthly report 

would require clearing firms subject to 

proposed NASD Rule 3160(b) to 

identify, among other things: (1) The 

broker-dealer’s name; (2) the number of 

transactions by the broker-dealer for the 

month; (3) the number of extension 

requests for the month; and (4) the ratio 

of the number of extensions requested to 

total transactions. The rule proposal 

would require that the reports be 

submitted no later than five business 

days following the end of each reporting 

month. The requirements of the 


pwalker on PRODPC60 with NOTICES
56204 Federal Register / Vol. 71, No. 186 / Tuesday, September 26, 2006 / Notices 

9See Exchange Act Release No. 28726 (December 

28, 1990), 56 FR 540 (January 7, 1991) (SR–NYSE–

89–24); and NYSE Information Memoranda 98–09 

(March 5, 1998) and 94–22 (June 10, 1994); see also 

NYSE Information Memorandum 05–78 (October 

12, 2005). 

10See supra note 5. 

11See supra note 6. 

12 15 U.S.C. 78o–3(b)(6). In approving this 

proposed rule change, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

13 15 U.S.C. 78s(b)(2). 

14 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 In October 1999, the Commission approved 

NYSE Arca Equities Rule 5.2(j)(3), which sets forth 

the rules related to listing and trading criteria for 

Investment Company Units. See Securities 

Exchange Act Release No. 41983 (October 6, 1999), 

64 FR 56008 (October 15, 1999) (SR–PCX–1998–29). 

In July 2001, the Commission also approved the 

Exchange’s generic listing standards for listing and 

trading, or the trading pursuant to UTP, of 

Investment Company Units under NYSE Arca 

Equities Rule 5.2(j)(3). See Securities Exchange Act 

Release No. 44551 (July 12, 2001), 66 FR 37716–01 

(July 19, 2001) (SR–PCX–2001–14). The definition 

of an Investment Company Unit is set forth in NYSE 

Arca Equities Rule 5.1(b)(15), which provides that 

an Investment Company Unit is a security 

representing an interest in a registered investment 

company that could be organized as a unit 

investment trust, an open-end management 

investment company or a similar entity. 

4See Securities Exchange Release No. 54458 

(September 15, 2006) (SR–NYSE–2006–60) (the 

‘‘NYSE Proposal’’). 

5NYSE Arca Equities Rule 5.2(j)(3)(A)(i)(a) allows 

the listing and trading of Investment Company 

Units issued by a registered investment company 

that holds securities comprising, or otherwise based 

on or representing an interest in, an index or 

portfolio or securities. The Trust is registered under 

the Investment Company Act of 1940 (15 U.S.C. 

80a) (the ‘‘Investment Company Act’’). On April 15, 

2005, the Trust filed with the Commission a 

Registration Statement for the Funds on Form N–

1A under the Securities Act of 1933 (15 U.S.C. 77a), 

and under the Investment Company Act relating to 

the Funds (File Nos. 333–92935 and 811–09729). 

proposed NASD monthly reporting 

requirement are consistent with the 

NYSE’s current program.9

III. Summary of Comment Received 

and NASD Response 

The Commission received one 

comment letter to the proposed rule 

change.10 The commenter stated that the 

proposed monthly reporting 

requirement would place an undue 

burden on self-clearing firms and 

requested that NASD amend the 

proposed rule to clarify that the 

monthly reporting requirement applies 

solely to clearing firms which clear for 

other broker-dealers. In its response, 

NASD stated that it did not intend for 

the proposed monthly reporting 

requirement to apply to self-clearing 

firms that do not clear for other brokerdealers, and that the proposed rule 

would not require these self-clearing 

firms to file the monthly report. 11

Finally, NASD stated that it will 

reiterate this position in the Notice to 

Members announcing Commission 

approval of the proposed rule. 

IV. Discussion and Commission 

Findings 

The Commission has reviewed the 

proposed rule filing, as amended, and 

finds that the proposed rule change, as 

amended, is consistent with the 

requirements of the Exchange Act, and, 

in particular, Section 15A(b)(6) of the 

Act,12 which requires, among other 

things, that NASD’s rules must be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, and, in general, to protect 

investors and the public interest. The 

Commission believes that the proposed 

rule change will further assist NASD in 

ensuring that firms are complying with 

financial responsibility rules and 

preventing the excessive use of credit 

for the purchase or carrying of 

securities. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,13 that the 

proposed rule change (File No. SR–

NASD–2006–064), as amended, be, and 

it hereby is approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.14

Nancy M. Morris, 

Secretary. 

[FR Doc. 06–8239 Filed 9–25–06; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–54473; File No. SR–

NYSEArca–2006–60] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and Order 

Granting Accelerated Approval of 

Proposed Rule Change Relating to 

Trading Shares of iShares S&P 

Global Index Funds Pursuant to 

Unlisted Trading Privileges 

September 20, 2006. 

Pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 14, 2006, NYSE Arca, Inc. 

(‘‘Exchange’’), through its wholly owned 

subsidiary NYSE Arca Equities, Inc. 

(‘‘NYSE Arca Equities’’ or the 

‘‘Corporation’’), filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons and is 

approving the proposal on an 

accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to trade 

shares (‘‘Shares’’) of the following five 

funds of the iShares Trust (the 

‘‘Trust’’): iShares S&P Global Consumer 

Discretionary Sector Index Fund, 

iShares S&P Global Consumer Staples 

Sector Index Fund, iShares S&P Global 

Industrials Sector Index Fund, iShares 

S&P Global Utilities Sector Index Fund 

and iShares S&P Global Materials Sector 

Index Fund (the ‘‘Funds’’) pursuant to 

unlisted trading privileges (‘‘UTP’’) 

under NYSE Arca Equities Rule 5.2(j)(3). 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of, and basis for, 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item III below. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Under NYSE Arca Equities Rule 

5.2(j)(3), the Exchange may propose to 

list or trade pursuant to UTP 

‘‘Investment Company Units.’’ 3 The 

Commission previously approved a 

proposal to list and trade the Shares of 

the Funds by the New York Stock 

Exchange, LLC (‘‘NYSE’’).4 The 

Exchange proposes to trade pursuant to 

UTP the Shares of the Funds under 

NYSE Arca Equities Rule 5.2(j)(3).5

Because the Funds invest in non-U.S. 

securities not listed on a national 

securities exchange or the Nasdaq Stock 

Market (‘‘Nasdaq’’), the Funds do not 

meet the ‘‘generic’’ listing requirements 


pwalker on PRODPC60 with NOTICES